Which of the following statements about the demand curve is correct? An increase in the price of a good will:

• A. cause a movement up along the demand curve, not a shift to the left
• B. cause a movement down along the demand curve
• C. shift the demand curve to the right
• D. shift the demand curve to the left

Answer: (A)

Verified step by step guidance

1. Understand the difference between a movement along the demand curve and a shift of the demand curve. A movement along the demand curve occurs when the price of the good itself changes, affecting the quantity demanded.
2. Recall that a change in the price of the good causes a change in quantity demanded, which is represented as a movement along the existing demand curve, not a shift of the curve.
3. Recognize that a shift of the demand curve happens when factors other than the price of the good change, such as consumer income, tastes, prices of related goods, or expectations.
4. Analyze the given options: an increase in the price of the good will cause a movement up along the demand curve (since higher price leads to lower quantity demanded), not a shift to the left or right.
5. Conclude that the correct statement is that an increase in the price of a good causes a movement up along the demand curve, reflecting a decrease in quantity demanded, rather than shifting the demand curve itself.